As the EMV standard begins to take effect, we regularly receive questions about its implementation, so we wanted to clear up any misconceptions that people might have and answer some of the common queries that we hear:
Is EMV Outdated?
While the EMV specification was originally developed in 1994, it has been continuously updated in the years since then, with new releases regularly added in order to remain up to date.
Is EMV Needed for Mobile Payments?
The EMV council predicted that mobile payments would be a major part of the payment ecosystem, so they developed a mobile EMV standard in 2010, ensuring that it would be included in their fraud protection efforts.
Does EMV Only Apply to Chip and PIN Transactions?
While the majority of countries use chip and PIN, three major countries use chip and signature: the United States, Mexico, and Brazil. For the reasons mentioned above, consumers and card issuers in the United States prefer to use chip and signature, so signatures will not be going away anytime soon.
Does EMV Actually Reduce Fraud?
Following the implementation of EMV, fraud dropped by 67% in Europe and 58% in Canada. It is obviously an effective method of reducing fraud, so it is important to meet these standards. As the United States begins to adopt EMV compliance, it will be interesting to see how the use of chip and signature along with these standards will affect fraud.
Will EMV Actually Reduce Fraud in the United States?
While the United States only operates 24% of global credit card transactions, it is the recipient of 50% of the share of global credit card fraud. The US obviously needs to implement a solution to fight this fraud, and EMV compliance is a large part of doing so.
Is EMV the Only Solution for Fraud?
While the goal of EMV is to eliminate fraud, it will not affect the types of data breaches that have impacted major retailers like Target and Home Depot. EMV ensures that a card is valid, but when using chip and signature, it does not determine whether the user of the card is legitimate. It stops fraudulent cards from being used, but it will not stop people from stealing existing card information, which is why it is important for retailers to implement procedures to protect against data breaches, or preferably avoid storing credit card information altogether.
Does EMV Replace the Need for Tap and Pay?
Many existing credit card readers offer the capability to tap a card to the reader rather than swipe it. While retailers may believe that implementing EMV will eliminate the need for this tap and pay ability, the desire to use contactless payment is soaring. In addition, mobile payments using Near Field Communication (NFC) are an emerging technology, and they have been popularized by the Apple Pay service used in the latest versions of Apple’s iPhone and the upcoming Apple Watch. EMV card readers require a card to be inserted and left into the reader for a few seconds, which means more and more consumers will likely prefer to use contactless payment. With this trend, a major training issue is approaching, and retailers will need to be prepared to handle it.
Will the Date for EMV Compliance be Pushed Back?
We don’t see any evidence of the October 2015 Fraud Liability Shift Date being changed. Retailers will need to be ready to meet this deadline.
Will Non-EMV Cards Still be Supported?
Retailers will still be able to accept credit cards that do not contain a chip, but they will not be liable for any fraud related to these cards. For cards without chips, the liability will remain with the card issuer.
As you look at how best to meet the requirements for EMV compliance, you have an opportunity to ensure that your payment system is providing you with the security and fraud protection that you need.
If you have any further questions about EMV and how to make sure you are compliant, please contact us.
